One Major Advantage of the Medium of Exchange Function of Money

question 174

Multiple Choice

One major advantage of the medium of exchange function of money is that it allows society to:

• A)transfer purchasing power from the present to the future.
• B)measure the relative worth of products.
• C)escape the complications of barter.
• D)use credit cards instead of currency.

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Definitions:

Inventory Valuation

The method used to determine the cost associated with an inventory at the end of a financial period, which affects cost of goods sold and, consequently, net income.

Net Income

The net income of a company following the deduction of all taxes and expenses from the gross revenue.

FIFO Cost Flow

An inventory valuation method in which the costs of the earliest goods purchased are the first to be recognized in determining cost of goods sold.

Current Costs

These are the costs that are associated with the purchase or production of goods and services in the current period.